Krispy Kreme's Turnaround Shows Progress in Margins but Struggles with Revenue Growth
Krispy Kreme (NASDAQ:DNUT) reported second-quarter results showing mixed performance. While Adjusted EBITDA surged by 43.2% to $28.8 million and leverage decreased, net revenue fell 12.8% year-over-year to $331.0 million — marking the fourth consecutive quarterly loss for the company. The improvement in margins was driven primarily by cost-cutting measures such as outsourced logistics and reduced capital expenditures. The restructuring efforts have also led to a reduction in global points of access, largely due to closures tied to an ended partnership with McDonald's USA. International revenue declined 11.6% partly because of the refranchising of Japan operations. Despite these challenges, Krispy Kreme has made progress on its deleveraging goals and is expanding through franchising, adding nearly 60 new shops in fiscal year 2026. The company maintains full-year guidance for net revenue between $1.25 billion to $1.35 billion and Adjusted EBITDA of $140 million to $150 million. However, the bear case remains focused on whether a shrinking store footprint can still meet these ambitious targets.
Tickers: $DNUT
Topics: adjusted EBITDA growth deleveraging franchising strategy revenue decline